Treasury Today Country Profiles in association with Citi

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Booking.com, Highly Commended, Best Cash Management Solution

Photo of Vijay Shankar, ANZ, Yankit Gupta and Bart Verweij, Booking.com.

Booking.com books over 1.5m rooms per night. Its major cash management challenges were the problems of dealing with global and trapped currencies, under-developed banking infrastructure, ever-changing regulations and a rapidly growing client base. The company worked with its bank to deliver a solution which involves virtual accounts in Greater Mekong.

Photo of Vijay Shankar, ANZ, Yankit Gupta and Bart Verweij, Booking.com.

Yankit Gupta

Senior Banking Specialist, Treasury

As one of the world’s largest travel e-commerce companies and a digital technology leader, Booking.com is the global leader in connecting travellers with the widest choice of incredible places to stay. The company has listings for more than 1.5m properties in over 225 countries and territories, and facilitates bookings for over 1.5m room nights every 24 hours on its website and mobile apps.

in partnership with

Core values of global scale and local relevance evident in this solution

The challenge

The Booking.com platform has a truly global footprint, which creates a number of unique challenges, particularly in doing business in emerging markets in Asia Pacific, Africa and South America. Booking.com also has local support entities, with offices in 70 countries which are required to pay local staff salaries and local operating expenses in countries where physical operations occur.

Daily challenges for Booking.com include dealing with global and trapped currencies, limited or undeveloped banking infrastructure, general infrastructure challenges, ever-evolving regulatory situations, a rapidly growing customer base, and emerging technologies related to payments and collection solutions and cash concentration systems.

Booking.com’s geographical presence across Asia Pacific meant the company had to investigate the right partner banks which could support its cash management model for liquidity management, collections and payments. It also wanted to leverage the right technology that existed within these markets to streamline operations.

The solution

The chosen solution, provided by ANZ, included the following:

  • Local non-resident accounts that hotels could pay into without a high cost factor.

  • SWIFT Score reporting and payment technologies using FIN and FileAct across countries such as Australia, NZ, as well as Asian territories including the Greater Mekong region and Pacific Islands that are early-stage emerging economies.

  • Access to an electronic banking system that supported the operational requirements of the business within the operating hubs;

  • Exploring non-standard payment infrastructure options and implementing where possible.

  • Using virtual accounts in the Greater Mekong region to improve the efficiencies of straight-through reconciliation.

  • Process optimisation through key reference allocations for collections received in various markets.

  • Cross-border cash concentration structures for commissions to be repatriated back to the global pooling bank.

Yankit Gupta, Senior Banking Specialist, Treasury explains, “A combination of cash management fundamentals, payments and collections process engineering, and leveraging various technologies enables us to deliver an efficient treasury ecosystem which provides enterprise benefits for both our customers and the company.”

Best practice and innovation

In APAC, the business operates in complicated markets such as Myanmar, Laos, Cambodia, Papua New Guinea, Fiji, Samoa and Vanuatu, while also operating in more established markets such as Singapore, Hong Kong, Australia and New Zealand along with highly regulated key markets such as Thailand, Indonesia, Vietnam, India and Sri Lanka. Across all of these markets they have been able to deploy a best practice approach where they use SWIFT Score technology for reporting and payments, electronic banking systems as support to the file exchange capability, common global implementation standards, global card acquirer services, automated cross-border cash concentration structures in line with local market regulations, straight through reconciliation, and an efficient bank relationship management and service model.

“At Booking.com, we are chuffed to be recognised as Highly Commended Winner for Best Cash Management Solution at the Adam Smith Awards Asia 2017. We are thrilled to be shortlisted from such a diverse and established set of companies, representing a wide variety of industries. Given our presence in pretty much every country in Asia, we were keen to share what we’ve learned in terms of best practices and successes in our key markets throughout the region.”

Booking.com manages a successful execution of strategy via a dedicated project team that implements all of the technologies and structure processes to achieve the best possible results. Virtual accounts are one example where the VA credit process is notified to the hotels where credits to a virtual account offer simplified reconciliation via the collection of specific data reference points. Equally, where the GUI doesn’t exist, the supporting banks load reference fields with the data that Booking.com requires to help the reconciliation process.

Key benefits

  • Improved balance sheet position and timely recognition of cash.

  • Best in industry collection rate of over 99.5% globally with over 1.5m accommodation partners in over 225 countries and territories.

  • Reduction in the cost of accounts receivable processes.

  • Lean operating model for treasury teams – one central treasury team based in the Netherlands (HQ).

  • Cash optimisation through global cash pool improving interest performance.

  • Reducing costs of payments and reconciliation through use of electronic payment mechanisms where possible.

  • Standardised file forms reduce the implementation costs or costs of change related projects.

Key learning points

  • Adapting to the constantly evolving financial, banking and payments landscape is key. The potential of fintechs in various markets needs to be tapped for effective and efficient cash management.

  • Keeping on top of regulations and regulatory situations is extremely important in emerging markets in Asia to ensure minimal operational impact and compliance challenges.

  • Being locally relevant yet globally scalable is a guiding principle for us at Booking.com and this is particularly key for us in our treasury department when we look to implement solutions in such a diverse region as Asia.

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